People Patterns uses Behavioural Economics as a new source of advantage for innovative businesses. Email me bri@peoplepatterns.com.au to unlock the secrets of consumer behaviour for your business or follow the latest on Twitter @peoplepatterns.

Wednesday, October 5, 2011

Time market research got real: How beer and banking show us how

I don't drink beer. I don't follow rugby. I am not into gaming. So why on earth have I become addicted to the Heineken Rugby World Cup iPhone game?

Gap between intended and actual behaviour
Sure, addicted is probably putting it too strongly, but my affair with Heineken got me thinking about the gap between intended and actual behaviour You see had I been invited to a market research group and asked about my gaming, beer and rugby behaviours, there is absolutely no way I would have predicted my own slavish usage of the final product. I mean, who has the time or interest in pretending to punt a ball over an imaginary goal post? I just doesn't make rational sense.

And that's the rub for product marketers. We spend a lot of time researching what our market think of our widget or brand, but we often get results based on intended rather than real behaviour.

Here's where Behavioural Economics comes in.

Behavioural Economics gets to the truth of behaviour
Behavioural Economics is based on behavioural studies rather than attitudinal ones, so in my scenario the research would have tested the efficacy of different techniques to stimulate download - from memory, I downloaded from an ad on a newsite, the user flow for download, any inhibitors to sign-up (eg asking for date of birth might have been too sensitive), and so on. Traditional market research would more likely have spent time defining the target market (i.e. not me) and predicted take-up based on reported intent.

As to uncovering what would influence me to download the game, common theories would revolve around the creative's call to action, the perceived value of the user benefit, maybe even personal recommendation. If I had been asked, I probably would have said a combination of these factors. But what really influenced me? Whilst of course I had to see and understand the ad, I could have ignored it like I have every other. What made me download the App was that I was looking for examples of how brand's were applying social media to engage their customers. That's right, a virtuous professional reason! Behavioural Economics would have used tested techniques to influence downloads - herding (doing what others do) and completion (my willingness to step up and kick for Australia) amongst them.

How Westpac NZ has used behavioural economics

An example that's fast becoming a classic illustration of closing the gap between intended and real behaviour is the Westpac New Zealand Impulse Saver App. Developed on the insight that people have till now had the mechanisms to impulse buy (money, credit cards), but not impulse save, the App allows customers to add money to their savings at the touch of a button. The bank's objective is to grow the penetration of savings accounts beyond 49% of population. Did the insight come from discussions with a focus group? I don't believe so. Whilst market research quantified the volume of savings accounts and no doubt other market sizing elements, the key insight was instead based on observation of actual behaviour. New Zealanders impulse spend $16.1m every day.

Behavioural Economics can overcome short comings of Market research

So am I bagging market research? No, I think the more time we can spend understanding our market the better. But I do believe market research techniques that concentrate solely on intended and predicted behaviours have serious short comings. Sophisticated researchers use different techniques to try and dig beneath hyperbole (I particularly like image based metaphors to untap emotional and cognitive associations, and there's some merit in ethnographic observation), but behavioural economics can take it so much further by translating insights about actual behaviour into...well, actual behaviour. And as a marketer, that's our goal!

About Me

Hi! I'm Bri Williams and I run People Patterns, a consultancy specialising in buyer behaviour. I deliver benefits to you by tweaking the interactions you have with your buyers through the application of behavioural science. A marketer and consumer behaviouralist, I've worked across industries for over 15 years, am a specialist contributor to Smartcompany.com.au, facilitator, speaker and author. Contact me at bri@peoplepatterns.com.au to find out how to get your buyers to buy more.

Services available from People Patterns

People Patterns is about businesses getting their buyers to buy more through the application of proven techniques from behavioural sciences such as behavioural economics. By knowing the patterns, you can take the guess work out. Thin of it like "Magician's Secrets finally revealed", but for buyer behaviour!

Contact me via bri@peoplepatterns.com.au or 0408 392 173 to find out about what a difference this new perspective can bring. An obligation free chat could be the best thing you do for your business this year!